After attending all the budget workshops for the Lake County (FL) School District (LCSD) this past year, I have started searching for better examples of budget formats, transparency procedures & budget management reports used by other government agencies. The LCSD system of budget approvals is a mess, and mostly the fault of all the prior administrations, including the outgoing elected Supt., Anna Cowin, and her staff, who use a haphazard system, don't provide complete info to the Board, and do not make it easy for the public to follow the discussions. Additionally, the budget reports use "ancient" regulatory formats that are not easy for any reader to understand.
So, I went through the 400+ page LCSD annual detailed budget (that cost me $56) and compared it to St. Paul's budget reports. Here is a look at what the City of St. Paul, MN does just to make it much easier for the elected officials and taxpayers, including much improved budget reports, processes to get meeting notifications and see budget hearing agendas and VIDEOS. LCSD has a total budget of over $650-million, and 5000 employees. St. Paul has a SMALLER budget and under 3000 employees, but provides significantly better budget formats and systems and information related to budgets for the taxpayers. I recommend the reader visit the St. Paul website and download both the operating and capital budgets to look at the format. The budget formats used by St. Paul might be Minnesota requirements, which indicates their budget management standards are definitely on a higher level than Florida.
This analysis took me about 4 hours to write.
1. First, you can go to the St. Paul website and sign up for email notifications on several different types of subjects, INCLUDING notification about budget meetings. LCSD has NO notification function at all for any issue or meeting - the taxpayer must search the website and find the "special meeting" agendas, open them to see if they include budget topics. The same for the main Board meetings. There is a SECRET meeting notification email of a press release with meeting agendas, but you have to know it exists, and get on the email list used by the Supt. office. Otherwise, you can only look at the calendar on the LCSD website and see if an agenda is posted (not the press release, which lists upcoming and REVISED meeting details). At the very least, LCSD should create a menu item "Meetings" and provide the most current press release, as well as links to the calendar. LCSD also needs an email meeting notification subscription feature that visitors can sign up for.
2. St. Paul uses a very clean website design from a firm specializing in government websites: http://www.civicplus.com/ .
3. I signed up for the SP budget emails, and received a list of planned meeting dates AND budget subjects to be discussed at each specific meeting - the calendar was for several future months. Upon opening the document they sent me, you can go to THIS link and see all the details. You can see the dates and agendas for the upcoming meetings, AND you can see and watch videos of the last TWO YEARS worth of specific budget hearings. In contrast, LCSD doesn't put any committee specific info or agendas on their website. You can only get a meeting agenda, then search it to find a generic term of what will be covered. For instance, SP's budget calendar says the specific dept. budgets that will be reviewed at a meeting, but LCSD doesn't provide a clue, not even at the meetings.
4. I have found that LCSD budget "hearings" are very hard to follow. They don't tell the audience what is being discussed, the microphones are not always turned on, minutes are weeks or months late, and discussions refer to handouts only given to the Board, staff and unions. Copies of the handouts are NOT available online or for the public. I had to pay $56 to get a printed copy of the LCSD annual, DETAILED budget, since it is NOT on the website. In contrast, St. Pauls complete detailed operating AND separate capital budgets are on their website.
5. St. Paul has a specific budget committee with agendas LIKE THIS DETAILED AGENDA while LCSD has no formal budget committee, thus the budget is mostly reviewed in daytime during scheduled "special meetings" that cover many other topics. LCSD needs to establish a formal budget committee and hearing process that is separate from all other Board topics.
6. St. Paul makes VIDEOS available for each budget committee meeting in the last two years. They have a cool video interface and good quality video. (Naturally, this costs some dollars, but if meetings are in the daytime, it is the only way to provide transparency on budgets to people who can only view it at night via the Internet ). The videos are available at the link in item 3 above. The video player used also shows the agenda, and you can click on links in the agenda to jump to the video portion related to the agenda item. WOW!!!
7. The St. Paul meeting list also has a column for minutes of meetings, but apparently they rely on videos and do not provide meeting transcript minutes. LCSD creates minutes of meetings, but they can be a MONTH or more before being ready. In contrast, St. Paul has the meeting video up on the website within two days.
8. LCSD ONLY provides a copy of the "summary" annual budget HERE, but you have to search for it by flipping through menus under "Finance" to locate it. The LCSD budget summary is ONLY 15 pages for the $650-million district. There is no explanation of the budget process or links to budget meeting info. However, St. Paul provides a 497 page main DETAILED operating budget page HERE that explains the process, then has links to copies of the budget, scheduled meetings for the upcoming year and links to videos of budget meetings. This is separate from the page we described above that just lists budget meetings. LCSD needs to provide a main page with an explanation of the budget process, links to scheduled meetings, budget copies, etc. St. Paul also has a separate 130 page downloadable capital budget.
9. LCSD commingles normal operating expenses and revenues with capital expenditures. The result is a distorted "budget total" that can fluctuate wildly from one year to the next depending upon what is being spent on school construction. IN CONTRAST, St. Paul provides a SEPARATE 497 page DETAILED operating budget and a 130 page capital expenditure budget so the operating expenses can be more accurately compared from one year to the next.
10. St. Paul, like many professional budgets I have seen, rounds the budget totals to the nearest "thousand", which then lets the reviewer more easily understand where the "big bucks" are. Meanwhile, LCSD prints line item amounts to include pennies, thus overwhelming any reader with much more text, making it harder to identify the significant expenditures. Showing actual amounts down to the penny are fine for internal accounting reports, but rounded totals are much easier for readers, and all more columns to add other analysis like percentage amounts.
11. The LCSD detailed budget is ALL numbers by department, except for a few supplementary explanation sheets for line items (which are good information, and should be continued). However, the St. Paul Operating budget contains an index by department, then each departmental section includes an organization chart, followed by a narrative describing "what we do" plus "accomplishments" for the year (many described in MEASURABLE terms), plus future year "goals" and also a departmental wide brief budget explanation in narrative firm. (LCSD leaves you to guess what the department does based upon the department title). Additionally, the St. Paul budget format includes a column showing the dollar CHANGE from the prior year so the reader can EASILY understand changes. Additionally, most businesses would also show the % change, and another column would show the line item's percent of the department total. St. Paul also includes a department section showing funding sources, so ALL department data is in one place. (Note: One LCSD department, Growth Planning, DID provide a narrative that was quite good
12. The St. Paul budget format enhances individual ACCOUNTABILITY for departmental budgets by listing both the organization chart, PLUS the department director's actual name. Readers do not have to guess who is responsible for achieving the budget and departmental goals. (LCSD has none of this in the detailed budget).
13. Slicing and Dicing: The St. Paul departmental operating budgets also show different views or "slices" of revenue sources and spending. They provide a table showing "spending by unit", "spending by major object", and "financing by major object". There is also "spending by type of expenditure" and by "type of activity". LCSD does NOT show activity (or project) budgets or spending, but St. Paul does. For instance the Financial department budget section shows spending for "GASB 34 Implementation".
Recommendations
REC-1: It is time LCSD stopped using a 50 year old budget format. The regulatory version can still be produced for government agencies that require it, but a modified version is needed for district management, public and Board analysis.
REC-2: LCSD to make the meetings and budget hearings more transparent by:
- adding ability for taxpayers to sign up for email notifications of all meetings and press releases.
- creating a separate budget committee like St. Paul with separate meetings and agendas
- posting of TIMELY (within 1-3 days) meeting minutes or videos on the website
- posting of all supporting discussion documents on the website 3-5 days BEFORE the meeting
- posting of all actual meeting presentations, documents on the website by agenda topic within 3-5 days after the budget hearing
REC-3: LCSD needs to split out capital budgets and spending from operating budgets and spending so fluctuating capital spending does not distort year to year comparisons.
REC-4: LCSD needs to provide the FULL, detailed budget in both proposed, revised and final versions on the website within 3-5 days after creation. Only providing a 15 page annual budget summary is NOT acceptable. This should be done for both the operating budget as well as a separate detailed capital budget.
REC-5: LCSD needs to add a "budget" homepage on the website with a description of the budget process and timeline, with links to related budget documents, minutes, etc.
REC-6: LCSD also needs to research other budget transparency methods used by other agencies, identify the best ones, and implement them.
REC-7: LCSD should adopt the St. Paul method of printing budget line item amounts rounded to the nearest thousand dollars (or at least hundreds) to improve the ability of readers to understand the significant dollar line items. This process also reduces space per column, which allows space to show year to year percentage changes. Data columns should all be right justified. We saw some LCSD total columns (budget section I1) that were centered, which again made it much harder to identify the larger amounts for analysis.
REC-8: LCSD should adopt the departmental budget format like St. Paul (described in item 11 above), including an organization chart, a narrative of what the department does, their prior year MEASURABLE accomplishments, their next year goals with expected measurable key performance indicators, the dollar change column, percent change column, and department wide percent value column (also known as common size analysis). Additionally, the department budget section should include a table of revenue sources, so all information related to the department is in one place.
REC-9: Expand department manager accountability by not only including the department organization chart, but the department manager's name. I would ALSO add the chain of command, so the reader can see which Deputy Superintendent was responsible for the budget and clarity of goals, etc. St. Paul not only includes the Department Director name, the Division head's name, but the fund (accounting) manager's name ON EACH PAGE.
REC-10: LCSD needs to also expand departmental budget sections to show different views of spending and revenue sources like described in item 13 ( Slicing & Dicing) above.
Next time:
- We will examine actual LCSD budget regulatory formats vs other easier to use examples from other agencies.
- We will discuss quality of details provided for budget decisions
- Provide an evaluation of what is NOT presented to the Board for approval to support budget decisions, and compare the justifications to what a business would use.
vj
